Despite record sales, Nintendo is coming under pressure on the stock market. A weak profit outlook, rising memory chip costs and higher prices for the Switch 2 are causing skepticism among investors.
• Weak profit outlook weighs on shares
• AI boom drives up memory chip costs
• Higher Switch 2 prices lead to demand concerns
The Japanese video game company Nintendo can look back on a record year, which was largely influenced by the market launch of the Nintendo Switch 2. Nevertheless, the share lost 8.44 percent at the start of the week on the Tokyo stock exchange and fell to JPY 7,020.
The price drop was triggered by a disappointing profit forecast, combined with the announced global price increase for the Nintendo Switch 2.
Record sales meet missed market expectations
In the fiscal year ended March 31, 2026, Nintendo almost doubled net sales to 2.31 trillion yen. At the same time, net profit rose by over 50 percent to 424.1 billion yen. Despite the strong performance, operating profit of 360 billion yen fell short of analyst estimates. The outlook for the new financial year was particularly burdensome: With a forecast operating profit of 370 billion yen, Nintendo is well below the market expectation of 480 billion yen. The main reason for this is the expectation of declining hardware sales after the strong first year with almost 20 million units.
Graphics card hunger makes the console more expensive
The AI data center boom is driving demand for DRAM and NAND memory sharply, weighing on memory prices for consumer hardware like the Switch 2. Nintendo said higher component costs, particularly for memory, as well as tariffs would increase costs by around 100 billion yen in the current fiscal year. That’s why the console will be more expensive in Japan from the end of May and in Europe and North America from September 1, 2026. In Germany the RRP increases from 469 euros to 499 euros. Investors fear that the higher sales prices cannot fully protect hardware margins.
Software gaps and strategic options for investors
Market observers also criticize the so far manageable game lineup for the rest of 2026. While external developers are planning numerous titles, there is currently a lack of major internal releases that could support hardware sales. There are two scenarios for investors: Either the setback is seen as an opportunity to gain entry after expectations have been corrected, or investors wait until Nintendo provides new impetus with additional software announcements and more stable supply chains.
Between cyclical low and long-term IP potential
After the price decline, investors are faced with the question of whether Nintendo is facing a longer period of weakness or is simply experiencing a correction after the hardware hype. In the short term, what will be crucial is how consumers react to the price increases in the fall. A significant decline in demand could put additional pressure on margins despite higher prices. In the long term, however, investors are relying on the strong brand base and the expansion of the film and theme park business, which should make Nintendo more independent of the classic console cycle. The yen remains another factor: continued weakness in the Japanese currency could further increase the costs of imported components. The upcoming software announcements are likely to be crucial, as strong exclusive titles at Nintendo have historically often been decisive for hardware demand.
Claudia Stephan, editorial team at finanzen.net
This text is for informational purposes only and does not constitute an investment recommendation. finanzen.net GmbH excludes any claims for recourse.
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